Arena refrigeration costs to top $1 million

SOUTH HURON — Options of how to fund the upcoming $1 million replacement of the refrigeration system at the South Huron Recreation Centre were discussed by council Monday morning.

As previously reported, replacement of the arena's aging refrigeration system is to take place this summer in the off season, with completion before the ice is needed again in the fall.

Monday morning council accepted the tender from the project's lone bidder, CIMCO Refrigeration, at a cost of $1,015,977 plus HST. Other costs include $5,100 to remove asbestos from pipes in a wall during construction and $75,680 to I.B. Storey Engineering.

South Huron chief administrative officer Roy Hardy said the project has been identified by staff as the top priority project for 2013. In the wake of being denied about one third funding from the Community Infrastructure Improvement Fund, other funding options were presented to council Monday.

Council decided to fund the project with a $743,066 loan from the Federation of Canadian Municipalities (FCM) Green Municipal Fund, an FCM grant of $148,613, energy grants from Hydro One ($10,000) and Union Gas ($4,000), $85,402 from the Rec Centre reserve and $123,519 from the capital replacement reserve.

It is expected the FCM loan will be two per cent over a 20-year term. I.B. Storey has submitted an application on the municipality’s behalf to FCM for the loan and grant.

The municipality won't be able to submit their grant applications to Hydro One and Union Gas until after the project is finished, according to a report presented to council by treasurer Sandy Becker and Hardy.

Other funding options were presented to council, but those involved larger loans from the Ontario Strategic Infrastructure Financing Authority (OSIFA) that would come with a 3.44 per cent interest rate. Hardy said the municipality would only go ahead with an OSIFA loan in the worst case scenario.

Coun. Dennis Hockey said that while he would be voting in favour of moving ahead with the project, in the future he wouldn't be voting for big ticket items that don't have large grants. He said such projects aren't affordable without grants.

Mayor George Robertson noted that the arena project is "a fix," and has to be done, something Hockey agreed with.

Coun. Tom Tomes echoed Hockey's concerns about the lack of grants for the project.

Coun. Wayne DeLuca said grants from the upper levels of government are tougher to come by these days and municipalities can't afford large infrastructure projects without grants.

"It's not going to be an easy road," he said.

Hardy agreed, saying he doesn't see things changing in terms of grants until at least 2014-15.

"It's just the economic situation we're in," he said.

Council unanimously passed a motion approving the CIMCO tender and moving the project forward.